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When the Futures Price Is Above the Forward Rate, Astute

question 94

Multiple Choice

When the futures price is above the forward rate, astute investors may attempt to simultaneously buy a currency forward and sell futures in that currency. These actions would place ____ pressure on the forward rate and ____ pressure on the futures rate.​

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Definitions:

Confidence Interval

A range of values, derived from the sample data, that is believed, with a certain degree of probability, to contain the true population parameter.

Margin Of Error

An estimate of the amount by which an observed sample result may differ from the true value, providing a confidence interval for the estimation.

Statistic

A numerical characteristic or measure of a sample extracted from a larger population.

Student T Distributed

A probability distribution used in statistical analysis when the sample size is small and the population variance is unknown.

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